SAMARA UNIVERSITY

College of business and economics

Department of Marketing Management

Type of assignment: Group

Course title: MARKETING CHANNEL AND LOGISTICS MANAGEMENT

Course code: MKTM4051
Group name ID
1. Naol Mengistu……………………………...............…………..1302021

2. Kalid Ahmed …………………………………................………1301837

3. Asinakech Alemayehu……………………..............………1301631

4. Asegedech Aschenaki …………………………............….1301629

5. Meron Mulu……………………………....................………….1301897

6. Hana Demessie…………………………….................………1301787

7. Yordanus Boyalew………………………................……….1302105

8.Enquaye Kassie……………………..........................……..1301935
TABLE CONTANT
Catalog
1. Adidas company .........................................................................................................................................................1
1.1. Background of Adidas company..............................................................................................................................1
Adidas's brands include:..................................................................................................................................................1
1.2. Supply chain analysis...............................................................................................................................................2
1.2.1. Adidas' supply chain involves multiple key participants:.....................................................................................2
1. Suppliers:....................................................................................................................................................................2
2. Manufacturers:............................................................................................................................................................2
3. Distributors:................................................................................................................................................................2
4. Retailers:.....................................................................................................................................................................3
5. End Customers:...........................................................................................................................................................3
1.2.2. Flow of Goods:......................................................................................................................................................3
1.2.3. Flow of Information:.............................................................................................................................................3
1.3. Several potential inefficiencies within Adidas' supply chain...................................................................................3
1.3.1. Demand Forecasting:............................................................................................................................................4
1.3.2. Inventory Management:........................................................................................................................................4
1.3.3. Transportation:......................................................................................................................................................4
1.3.4. Lead Times:...........................................................................................................................................................4
1.3.5. Other factors:.........................................................................................................................................................4
1.4. Root Causes of Lead Time Inefficiencies in Adidas' Supply Chain:.....................................................................5
1.4.1. Supplier Relationships:.........................................................................................................................................5
1.4.2. Market Trends and Demand Fluctuations:............................................................................................................5
1.4.3. Internal Processes:.................................................................................................................................................5
1.4.4. Logistical Challenges:..........................................................................................................................................6
1.4.5. Technology and Information Systems:.................................................................................................................6
1.5. Proposed Solutions for Lead Time Inefficiencies in Adidas' Supply Chain:..........................................................6
1.5.1. Technology Adoption:..........................................................................................................................................6
1.5.2. Process Improvements:.........................................................................................................................................7
1.5.3. Supplier Relationship Management:.....................................................................................................................7
1.5.4. Demand Planning Enhancements:........................................................................................................................7
1.5.5. Logistics Optimization:.........................................................................................................................................7
1.6. Implementation Plan:.............................................................................................................................................8
1.6.1. Implementation Plan for Addressing Lead Time Inefficiencies in Adidas' Supply Chain:.................................8
1.6.2. Potential challenges and mitigation strategies within the adidas implementation plan:.......................................9
1. Resistance to change:..................................................................................................................................................9
2. Execution inefficiencies:.............................................................................................................................................9
3. Integration challenges:................................................................................................................................................9
4. External dependencies:.............................................................................................................................................10
5. Measurement and evaluation challenges:..................................................................................................................10
1.7. Cost-Benefit Analysis...........................................................................................................................................10
1. 7.1. Technology Adoption:.......................................................................................................................................10
1.7.2. Process Improvements:.......................................................................................................................................11
1.7.3. Supplier Relationship Management:...................................................................................................................11
1.7.4. Demand Planning Enhancements:.....................................................................................................................11
1.7.5. Logistics Optimization:......................................................................................................................................12
1.8. conclusion..............................................................................................................................................................12
Refrence........................................................................................................................................................................13
1. Adidas company
1.1. Background of Adidas company
Adidas AG is a German multinational corporation that designs and manufactures shoes, clothing
and accessories. It is the largest sportswear manufacturer in Europe and the second largest in the
world, after Nike. The company was founded in 1949 by Adolf Dassler, who had previously co-
founded Gebrüder Dassler Schuhfabrik with his brother Rudolf. The two brothers split in 1948,
with Adolf taking Adidas and Rudolf founding Puma.

Adidas's headquarters are in Herzogenaurach, Germany. The company employs over 56,000
people worldwide and generates annual revenues of over €20 billion. Adidas's products are sold
in over 160 countries.

Adidas's brands include:

 Adidas
 Reebok
 TaylorMade
 Runtastic

Adidas is a major sponsor of the Olympic Games and the FIFA World Cup. The company is also
a sponsor of many national and international sports teams, including Bayern Munich, Real
Madrid, Manchester United, and the New York Yankees.

Adidas has been at the forefront of footwear innovation, introducing technologies such as Boost
cushioning and Primeknit. The company is also committed to sustainability, and has set
ambitious goals to reduce its environmental impact.

Here are some additional facts about Adidas:

 The name "Adidas" is a portmanteau of Adolf Dassler's name and nickname.

 The three stripes on the Adidas logo are said to represent a mountain, a hill, and a plain,
symbolizing the challenges that athletes face.
 Adidas's most popular shoe is the Stan Smith, which has been sold over 300 million pairs since
its introduction in 1963.
 Adidas is a major sponsor of music and fashion, and has collaborated with artists and designers
such as Kanye West, Beyoncé, and Stella McCartney.

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1.2. Supply chain analysis
1.2.1. Adidas' supply chain involves multiple key participants:

1. Suppliers:

 Primary materials like textiles, rubber, and leather are sourced from various suppliers
globally.
 Suppliers play a crucial role in maintaining quality and sustainability standards.

2. Manufacturers:

 Adidas has manufacturing facilities and outsources production to third-party

manufacturers.
 Manufacturers convert raw materials into finished products, ensuring adherence
to design and quality standards.

3. Distributors:

 Once manufactured, products are distributed to regional warehouses and distribution

centers.
 Distributors play a pivotal role in managing inventory and facilitating the movement
of goods to retailers.

4. Retailers:

 Adidas products are sold through a diverse range of retailers, including company-
owned stores, franchise stores, and third-party retailers.

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  E-commerce platforms also serve as important retail channels.

5. End Customers:

 The ultimate consumers purchase Adidas products either through physical stores or
online platforms.
 End customers contribute to demand forecasting and influence product development
through their preferences.

1.2.2. Flow of Goods:

 Raw materials move from suppliers to manufacturing facilities.

 Finished products are transported from manufacturers to distribution centers.
 Products are then distributed to various retailers and e-commerce platforms.
 End customers purchase products from retail outlets or online channels.

1.2.3. Flow of Information:

 Information on demand trends is gathered from retailers and end customers.

 This information influences production planning and inventory management.

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  Communication between all supply chain participants is facilitated through digital

platforms and systems to ensure real-time updates.

1.3. Several potential inefficiencies within Adidas'

supply chain

1.3.1. Demand Forecasting:

 Inaccurate forecasting: Adidas experienced missed sales opportunities in 2018 due to

underestimating North American demand for mid-range apparel. This suggests a need for
improved forecasting mechanisms to account for regional trends and fluctuations.

1.3.2. Inventory Management:

 Excessive inventory: Accumulation of unsold product can occur due to inaccurate forecasting,
leading to increased storage costs and potential markdowns.
 Stock outs: Adidas has also faced instances of stock outs for in-demand items, resulting in lost
sales and customer dissatisfaction.

1.3.3. Transportation:

 Reliance on Asian manufacturing: The majority of Adidas' production occurs in Asia, making it
vulnerable to disruptions like regional lockdown or trade tensions. Diversifying manufacturing
locations could enhance resilience.
 Inefficient shipping: Optimizing routing and utilizing multi-modal transport could potentially
reduce shipping times and costs.

1.3.4. Lead Times:

 Long lead times: The reliance on overseas production translates to extended lead times, limiting
responsiveness to changing trends and customer demands. Shortening lead times through near-
shoring or on-demand production could be beneficial.

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1.3.5. Other factors:

 Complex supplier network: Managing a large number of geographically dispersed suppliers

presents challenges in maintaining quality control and ensuring timely deliveries. Streamlining
the supplier network could improve efficiency.
 Limited visibility: Lack of real-time data and transparency throughout the supply chain can
hinder effective decision-making. Implementing information systems that enhance visibility
could optimize operations.

Therefore, Adidas' supply chain inefficiencies seem to be a combination of factors, rather than
solely attributable to one specific issue. Addressing these inefficiencies through improved
forecasting, inventory management, transportation strategies, and enhanced supply chain
visibility could significantly improve its overall performance and customer satisfaction.

1.4. Root Causes of Lead Time Inefficiencies in

Adidas' Supply Chain:
1.4.1. Supplier Relationships:

 External Factor: Reliance on a network of global suppliers can lead to challenges in

coordinating and synchronizing production schedules.
 Internal Factor: Inconsistent communication and collaboration with suppliers may
result in delays in the procurement of raw materials.

1.4.2. Market Trends and Demand Fluctuations:

 External Factor: Rapid changes in consumer preferences and market trends can pose
challenges in accurately forecasting demand.
 Internal Factor: Inadequate mechanisms for gathering and analyzing market data may
lead to imprecise demand forecasts, impacting production planning.

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1.4.3. Internal Processes:

 External Factor: Market competition necessitates efficient internal processes.

 Internal Factor: Inefficient production workflows, quality control issues, or delays in
decision-making processes within Adidas can contribute to extended lead times.

1.4.4. Logistical Challenges:

 External Factor: Global transportation complexities, customs regulations, and

geopolitical events can disrupt the smooth flow of goods.
 Internal Factor: Lack of contingency plans and real-time tracking systems may
exacerbate the impact of external disruptions.

1.4.5. Technology and Information Systems:

 External Factor: Advancements in technology may outpace the company's adoption,

leading to outdated systems.
 Internal Factor: Inadequate integration of technologies for supply chain visibility and
data analytic s can hinder the ability to respond swiftly to changes in demand or supply
chain disruptions.

1.5. Proposed Solutions for Lead Time

Inefficiencies in Adidas' Supply Chain:

1.5.1. Technology Adoption:

 Solution: Implement advanced tracking and monitoring systems, such as RFID

technology, to enhance visibility across the entire supply chain.

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  Justification: Adidas can benefit from real-time insights into the movement of raw
materials and finished products, allowing for proactive decision-making and minimizing
the risk of disruptions.

1.5.2. Process Improvements:

 Solution: Streamline internal processes, from production to quality control, to reduce

bottlenecks and improve overall efficiency.
 Justification: A more efficient production workflow will contribute to shorter lead
times, enabling quicker response to changes in demand and reducing the likelihood of
delays.

1.5.3. Supplier Relationship Management:

 Solution: Strengthen collaboration with key suppliers through regular communication

and joint planning sessions to align production schedules.
 Justification: Building strong relationships with suppliers fosters a sense of partnership,
encouraging timely deliveries of raw materials and minimizing the impact of external
factors on lead times.

1.5.4. Demand Planning Enhancements:

 Solution: Invest in data analytic s tools for more accurate demand forecasting, taking
into account market trends, historical data, and consumer behavior.
 Justification: Accurate demand forecasts enable better production planning, reducing
the likelihood of excess inventory or stock outs and contributing to overall supply chain
efficiency.

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1.5.5. Logistics Optimization:

 Solution: Develop and regularly update contingency plans to address potential logistical
challenges, considering alternative transportation routes and modes.
 Justification: Having well-defined contingency plans ensures a more resilient supply
chain, capable of adapting to unforeseen disruptions in the transportation network.

1.6. Implementation Plan:

1.6.1. Implementation Plan for Addressing Lead Time Inefficiencies in

Adidas' Supply Chain:

 Implementation Timeline:

 Phase 1 (Short-term): Supplier consolidation, pilot production process optimization, initial

visibility platform implementation, and inventory optimization initiatives (6 months).
 Phase 2 (Mid-term): Expand production process optimization, roll-out visibility platform across
the supply chain, implement advanced inventory management systems (12 months).
 Phase 3 (Long-term): Continuous improvement through technology adoption, data-driven
decision-making, and strategic partnerships (ongoing).

 Resource requirements:

 The specific resources required will depend on the initiative, but may include:
o Financial resources: Budget to cover personnel costs, technology investments,
marketing expenses, etc.
o Human resources: Personnel with relevant expertise to execute the plan, such as
project managers, marketing specialists, IT professionals, etc.
o Technology resources: Hardware, software, and data infrastructure to support the
initiative.
o Materials and supplies: Physical resources needed for implementation, such as
marketing materials, promotional items, etc.

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  Key performance indicators (KPIs):

 The specific KPIs will depend on the objectives of the initiative, but may include:
o Financial metrics: Revenue growth, cost savings, return on investment (ROI).
o Marketing metrics: Brand awareness, customer engagement, website traffic, social
media followers.
o Operational metrics: Efficiency improvements, production output, inventory levels.
o Employee metrics: Employee satisfaction, retention rate, productivity.

1.6.2. Potential challenges and mitigation strategies within the adidas

implementation plan:

1. Resistance to change:

 Challenge: Employees may resist new processes, technologies, or organizational structures

introduced by the plan.

 Mitigation:
o Clear communication: Communicate the rationale behind the changes, benefits for
employees and the company, and address concerns transparently.
o Employee engagement: Involve employees in the planning and implementation process,
solicit feedback, and provide training and support.
o Change management plan: Develop a structured approach to managing change,
including milestones, communication channels, and support resources.

2. Execution inefficiencies:

 Challenge: Poor planning, unclear roles and responsibilities, or inadequate resource allocation
can lead to delays, errors, and cost overruns.

 Mitigation:
o Thorough planning: Develop a detailed plan with clear timelines, milestones, and
dependencies.
o Resource allocation: Ensure adequate personnel, technology, and budget are allocated
to each task.
o Project management expertise: Utilize experienced project managers to oversee
implementation and track progress.

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 o Risk management: Identify potential risks and develop contingency plans to minimize
their impact.

3. Integration challenges:

 Challenge: New systems, processes, or technologies may not integrate seamlessly with existing
infrastructure, leading to disruptions and inefficiencies.

 Mitigation:
o Thorough testing: Conduct thorough testing and pilot programs to identify and address
integration issues before full-scale deployment.
o Data migration strategy: Develop a comprehensive data migration strategy to ensure
accurate and secure transfer of information.
o Change management for systems: Train employees on new systems and provide
ongoing support to minimize disruption.

4. External dependencies:

 Challenge: Delays or issues with external partners, suppliers, or regulatory bodies can hinder
implementation progress.

 Mitigation:
o Strong supplier relationships: Build strong relationships with key partners and establish
clear communication channels.
o Contractual safeguards: Include clear terms and expectations in contracts with external
parties.
o Contingency plans: Develop alternative plans in case of external disruptions.

5. Measurement and evaluation challenges:

 Challenge: Difficulty in accurately measuring the success of the implementation plan due to
unclear KPIs, inadequate data collection, or lack of baseline data.

 Mitigation:
o Clear KPIs: Define clear and measurable KPIs aligned with the plan's objectives.
o Robust data collection system: Establish a system for collecting accurate and timely
data.
o Baseline data: Establish baseline data before implementation to track progress
accurately.

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 o Regular monitoring and evaluation: Regularly monitor progress against KPIs and adapt
the plan as needed.

1.7. Cost-Benefit Analysis

1. 7.1. Technology Adoption:

 Initial Investment:
 RFID implementation costs, including technology acquisition and installation: $2 million.
 Training programs for employees: $500,000.
 Expected Return on Investment (ROI):
 Short-term: Increased supply chain visibility and reduced lead times.
 Long-term: Improved operational efficiency and customer satisfaction.
 Overall Assessment:
 Positive ROI expected within 12-18 months.

1.7.2. Process Improvements:

 Initial Investment:
 Process audit and improvement consultancy: $1.5 million.
 Employee training programs: $300,000.
 Expected ROI
 Short-term: Reduction in production cycle time.
 Long-term: Streamlined workflows leading to sustained efficiency gains.
 Overall Assessment:
 Positive ROI expected within 6-12 months.

1.7.3. Supplier Relationship Management:

 Initial Investment:

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  Hiring supplier relationship managers: $1 million.
 Implementing collaborative tools: $500,000.
 Expected ROI:
 Short-term: Timely deliveries and improved collaboration.
 Long-term: Enhanced supplier relationships leading to better terms and reliability.
 Overall Assessment:
 Positive ROI expected within 12-24 months.

1.7.4. Demand Planning Enhancements:

 Initial Investment:
 Data analytics tools acquisition and integration: $3 million.
 Training programs for relevant teams: $700,000.
 Expected ROI:
 Short-term: More accurate demand forecasts.
 Long-term: Improved production planning and reduced inventory costs.
 Overall Assessment
 Positive ROI expected within 18-24 months.

1.7.5. Logistics Optimization:

 Initial Investment:
 Hiring logistics experts: $1.2 million.
 Developing and updating contingency plans: $800,000.
 Expected ROI:
 Short-term: Minimized disruptions and improved response to challenges
 Long-term: Resilient supply chain and reduced impact of disruptions.
 Overall Assessment:

- Positive ROI expected within 12-24 months.

1.8. conclusion

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 In conclusion, the proposed solutions present a comprehensive strategy to address lead time
inefficiencies within Adidas' supply chain. By leveraging technology adoption, process
improvements, strengthened supplier relationships, enhanced demand planning, and logistics
optimization, Adidas has the opportunity to significantly enhance the overall efficiency and
effectiveness of its supply chain.

The combined effect of these solutions is expected to result in a more agile, responsive, and
customer-centric supply chain for Adidas. Short-term benefits include reduced lead times and
improved supply chain visibility, while long-term advantages encompass sustained operational
efficiency, better collaboration with suppliers, and an overall enhancement of customer
satisfaction. The proposed investments align with a strategic vision for a resilient and efficient
supply chain, positioning Adidas for sustained success in the dynamic and competitive market
landscape.

Refrence
 Supply Chain page: https://www.adidas-group.com/media/filer_public/ca/ba/caba936a-
7da7-4710-9d88-d437bac87923/
adidas_responsible_sourcing___purchasing_policy_en.pdf - Provides an overview of
Adidas's global supply chain, including its structure, partners, and sustainability
initiatives.
 Supplier Lists: https://www.adidas-group.com/en/sustainability/transparency/supplier-
lists/ - Lists all of Adidas's primary suppliers, subcontractors, and licensees, by country
and location.
 Adidas Group Annual Report: https://report.adidas-group.com/2022/en - Contains a
dedicated section on the company's supply chain, including performance
metrics, challenges, and future plans.

 An Insight into Adidas Supply Chain Strategy: A Comprehensive Guide -

2023: https://dfreight.org/blog/an-insight-into-adidas-supply-chain-strategy/ - Analyzes
Adidas's supply chain structure, key partners, and performance metrics.
 Workers in the Supply Chain - adidas
Group: https://www.adidas-group.com/en/sustainability/social-impacts/workers-in-the-
supply-chain/ - Covers Adidas's approach to responsible sourcing and labor practices
within its supply chain.

 Fair Factories Clearinghouse (FFC): https://www.fairfactories.org/ - An independent

organization that monitors labor conditions in garment factories, including many of
Adidas's suppliers.

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 Open Supply Hub: https://opensupplyhub.org/auth/login - An industry initiative
promoting transparency in supply chains, with Adidas as a participating member.

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